Whether you own a small business in need of lawyers or you’re part of a Fortune 1000 company in Los Angeles looking for a freelance legal department, an understanding of how bilateral contracts work is essential. To ensure your transactions are legally binding, having a lawyer familiar with local regulations on your side can make a world of difference.

In this article, we’ll discuss what a bilateral contract is, how it works, and how to find the right lawyer to help you. We’ll also touch on the types of contracts and the importance of accuracy. At UpCounsel, our network of experienced business lawyers are here to help.

What is a Bilateral Contract?

A bilateral contract is a legally binding agreement between two or more parties that grants each the right to expect a performance from the other. A bilateral contract is created whenever two or more people agree on something, whether that's a service, exchange of goods, a promise to do something, or a promise to not do something.

In the context of business, a bilateral contract means that one company agrees to provide another with goods or services in exchange for an agreed upon price. In these cases, the agreement creates both a contractual duty and a corresponding agreement or promise to pay for those goods or services.

Key Components of a Bilateral Contract

When forming a bilateral contract, it’s important to include certain elements to ensure the agreement is valid and enforceable. These elements, known as the four corners of a contract, include an offer, acceptance, consideration, and a legal purpose.

Offer: An offer is the promise of a person or business to do something or refrain from doing something in exchange for something of value.

Acceptance: Acceptance is the consent of both parties to enter into an agreement, often evidenced by a signature or the exchange of money.

Consideration: Consideration is the exchange of goods, services, or a promise to do something.

Legal Purpose: The legal purpose of the contract is to specify the purpose of the agreement in order for the court to legally enforce it, if necessary.

Types of Bilateral Contracts

Bilateral contracts come in many forms and can be used in a variety of situations. Some of the most common types of bilateral contracts include:

Sales: Sales contracts are used when one business agrees to sell goods or services in exchange for payment.

Employment: Employment contracts are used when businesses hire an employee to work in exchange for wages.

Lease: Lease contracts are used when one party agrees to rent property to another in exchange for rent payments.

Accuracy and Validity of Bilateral Contracts

For a bilateral contract to be legally binding, it must meet certain criteria. It must include an offer, acceptance, consideration, and a legal purpose. It must also be written in language that both parties understand and agree to.

It’s important to make sure that all of the details are accurate and that all involved parties sign the documents. Any discrepancies or ambiguities can lead to legal issues down the line.

Finding an Experienced Business Attorney

It’s essential to have a lawyer familiar with local regulations to help guide you through the process of creating a contract. UpCounsel has an extensive network of experienced business attorneys who specialize in contract law.

Whether you need help drafting or negotiating a contract, UpCounsel’s attorneys can help. Our attorneys are expertly vetted and have an average of 14 years of experience. To ensure you’re getting the best legal representation, profiles of our online attorneys display client ratings and reviews of recent work.

At UpCounsel, you have access to high quality attorneys on demand. With UpCounsel, you have the peace of mind knowing that you’re getting the best legal help in your area.


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